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Model Railway Partwork - Coaches under ?5,


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The advert is becoming rather tedious already :no2:

 

I'm looking forward to the inevitable "Have you seen that advert with the trainset in, is it like yours and will you be buying it...?" 

 

I think I should do the right thing and buy up all of the first issues I can find, in order to stop them getting into the wrong hands and souring the image of our hobby.

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I think that's my point - if 'Railroad' haven't managed to get it 'cheap enough' for people (and you can get brand-new £5 wagons) using existing, simple, fully depreciated tooling, then you'd need to be doing something fundamentally different to the way they do things already.....and that's not what's being suggested.

 

One of the keys to how cheap you can make it is how many do you expect to sell, as the bigger run you can spread your development costs over then the cheaper the unit price is. So - what's the market size for a £3 (retail) mineral wagon, the same as the Bachmann one (currenly about £8.50?) but effectively with much less chassis detail? How many will you sell?

And more to the point anyone who sells it for that sort of price would go out of business pdq because they won't be making enough profit to sustain a business.  It simply can't be a 'one trick pony't type of operation so other vehicles would have to follow the  hypothetical mineral wagon which means distribution, development and sales and even if that is little more than a 'one man and his dog' type of operation it is still going to create overheads and they will have to be accounted for in the wholesale price which will in turn impact the retail price.  Say the wagons come out of China at £1 each - then add transport, packing (even polybags cost money), distribution, possibly advertising, and so on.  We're probably looking at £5 a wagon as a minimum simply to stay in business because the only income is from sales.

 

The Dapol ex Airfix mineral wagon kit retails for c£5.40-70ish judging by some current ads - from fully amortised tooling and, of course, unassembled.

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Perhaps the coach could form a basis for a 2014 RMWeb Challenge. Make something that looks good from it using only materials from your stockpile or the Modelzone closing down sale.

Of course that could depend on what your nearest branch of Modelzone had on offer - I seem to have acquired an awful lot of plasticard style stuff plus a decent stockpile of various Evergreen microstrip material.

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Just been looking at Hornby Railroad MkI's http://www.mremag.com/news/article/pre-production-samples-of-the-new-Hornby-br-mk1-coaches/15447

 

 

Two questions, Has a coach really been made for £3:99 and sold at a profit? people seem split that this is a loss leader, which seems a huge risk given the amount that have been sold,

 

The second, given that the Railroad Mki has an RRP of £17:99, (or even as quoted on the above site as £19:99) what could have been produced for say £7:99/£8:99?

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Just been looking at Hornby Railroad MkI's http://www.mremag.com/news/article/pre-production-samples-of-the-new-Hornby-br-mk1-coaches/15447

 

 

Two questions, Has a coach really been made for £3:99 and sold at a profit? people seem split that this is a loss leader, which seems a huge risk given the amount that have been sold,

 

The second, given that the Railroad Mki has an RRP of £17:99, (or even as quoted on the above site as £19:99) what could have been produced for say £7:99/£8:99?

I would suspect (see my earlier post) that the Railroad coach is actually produced for less than £7.99 - 8.99 and that explains why the RRP is around the £18 mark.  The production cost is only a small part of the overall price what with retailer's mark up, UK 'manufacturer's' mark up, tax and all the other costs which have to be allocated to an item sold in normal retail fashion.

 

There is whole chain of add-ons between production cost and retail price and the latter of course varies depending on how much the retailer is prepared to make on the deal - for example Hattons nett profit, as a business, in a recent financial year were only 3% (information in the public domain) and very few retailers are prepared, or able, to shave their nett margins that tightly.

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Of course that could depend on what your nearest branch of Modelzone had on offer - I seem to have acquired an awful lot of plasticard style stuff plus a decent stockpile of various Evergreen microstrip material.

You will be OK for fabricating the truss sections then.
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Has a coach really been made for £3:99 and sold at a profit? people seem split that this is a loss leader, which seems a huge risk given the amount that have been sold,

 

I bet Hachette went to a couple of Chineese toy manucacturers with a Bachman Sk, and said 'reverse engineer that to achive a cost to us of $2 based on a 10,000 run'. They have probably done exactly the same for all the other items in the overall partwork. The first few issues are probably at cost (including the 'magazine' ) and then Hachette will make a profit on the next hundred and however many that complete the series.

 

This series ran before as a test - did it ever run to completion, or did if fizzle out after a dozen issues?

 

jon

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I would suspect (see my earlier post) that the Railroad coach is actually produced for less than £7.99 - 8.99 and that explains why the RRP is around the £18 mark.  The production cost is only a small part of the overall price what with retailer's mark up, UK 'manufacturer's' mark up, tax and all the other costs which have to be allocated to an item sold in normal retail fashion.

 

There is whole chain of add-ons between production cost and retail price and the latter of course varies depending on how much the retailer is prepared to make on the deal - for example Hattons nett profit, as a business, in a recent financial year were only 3% (information in the public domain) and very few retailers are prepared, or able, to shave their nett margins that tightly.

 

Agreed, but I like the emphasis on produce, and not including the R&D costs. And I still suspect issue 1 is a known loss leader

 

Stewart

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I bet Hachette went to a couple of Chineese toy manucacturers with a Bachman Sk, and said 'reverse engineer that to achive a cost to us of $2 based on a 10,000 run'.

 

This series ran before as a test - did it ever run to completion, or did if fizzle out after a dozen issues?

 

I'd agree with that...

 

IIRC from the previous thread on here it ran for about 4 issues last time...

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I'd agree with that...

 

IIRC from the previous thread on here it ran for about 4 issues last time...

 

If the expectation is that it will fizzzle out after around 4 issues, it's a huge give away/risk to start with such a loss leader in the hope that the deminishing numbers will buy issues 2, 3 and 4?

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If the expectation is that it will fizzzle out after around 4 issues, it's a huge give away/risk to start with such a loss leader in the hope that the deminishing numbers will buy issues 2, 3 and 4?

 

I'd imagine that there's degree of 'test and learn' going on by the publisher. They'll release several dozen new part works every year, and expect to cancel a few of them (due to poor sales) after their first half dozen issues. So any losses on these will be counterbalanced by the profits on the successful titles.

 

It must be a workable business model, given the number of different part works that clutter up W H Smiths.

 

I guess the main risk is that you need your Chinese sub-contractors to produce the cheap plastic tat for the later issues pretty quickly. I suspect the plan is to book the factory production slots in advance without knowing exactly what they'll be producing.

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If the expectation is that it will fizzzle out after around 4 issues, it's a huge give away/risk to start with such a loss leader in the hope that the deminishing numbers will buy issues 2, 3 and 4?

 

To be clear, i'm not suggesting anyone should expect that to happen, (or not to happen) this time.

 

As Pete suggests they do seem to 'have a punt' on these and see what happens, if numbers hit a certain point then it continues, if it doesn't then it'll get cancelled.

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Perhaps the coach could form a basis for a 2014 RMWeb Challenge. Make something that looks good from it using only materials from your stockpile or the Modelzone closing down sale.

I'd be up for that.

Now lets see what I have got in my 'stockpile'.

An old Comet Mk1 underframe, excellent start.

Oh and look some Bachmann Mk1 sides.

A Mk1 underframe detailing pack, (make not known).

Oh, some Mk1 ends, coridoor connections and sprung buffers, (MJT).

Shall I get me coat? :jester:

Just found four sets of Alan Gibson coach wheels aswell.

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I'd be up for that.

Now lets see what I have got in my 'stockpile'.

An old Comet Mk1 underframe, excellent start.

Oh and look some Bachmann Mk1 sides.

A Mk1 underframe detailing pack, (make not known).

Oh, some Mk1 ends, coridoor connections and sprung buffers, (MJT).

Shall I get me coat? :jester:

Just found four sets of Alan Gibson coach wheels aswell.

Kinda defeats the object somewhat - buy a £4 coach and spend £20 making it look like a £25 Bachmann. ;)

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Kinda defeats the object somewhat - buy a £4 coach and spend £20 making it look like a £25 Bachmann. ;)

 

I'd say for the comp, do as many as you like, "but" the average spend per coach should be no more than £3, thus producing the finished coach for £6:99, do a rake of 5 and you have £15 to spend some suitable paint for the roof and transers etc.

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I'd say for the comp, do as many as you like, "but" the average spend per coach should be no more than £3, thus producing the finished coach for £6:99, do a rake of 5 and you have £15 to spend some suitable paint for the roof and transers etc.

Ah yes, but you also have to factor in time, and the cost of your labour doing coach conversions when you could be doing something else.

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I won't be buying this or the £17.99 Railroad coach. My current interest is blue & grey Mk 1s & Mk 2s in OO & I pay £5 to £8 each, including p&p, from eBay.

 

OK I spend a bit extra on decals & varnish to protect them, but the old Lima & Hornby models are good enough for me. Even if I flush glaze them that's only £2.50 a coach extra.

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Kinda defeats the object somewhat - buy a £4 coach and spend £20 making it look like a £25 Bachmann. ;)

My post is very much 'Tongue in Cheek'.

Thats why the Jester is there.

Had a look at one of these in the flesh and even for £3.99p I am not impressed.

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